【正文】 Lines 1 presentationCEMSx Strategic Impact of China?s entry into the WTO On Chinese and Foreign Companies Presentation for CEMS Universities in St. Gallen, Stockholm, Bergen, Milano November, 20xx Lines 2 presentationCEMSx Content Page A. The macroeconomic impact of China?s WTO entry 3 B. Automotive 11 C. Apparel amp。 Textile 22 D. Pharmaceuticals 36 E. Banking 42 F. Securities and Asset Management 48 G. Insurances 52 3 presentationCEMSx A. The macroeconomic impact of China?s WTO entry Lines 4 presentationCEMSx Already the tariffs have e down considerably in the last decade but they still differ strongly between industries Weighted average tariff rates of manufactured products Weighted average tariffs with and without WTO accession Source: World Bank, 1999 4 6 . 5444 0 . 62 3 . 21 7 . 8 1 8 . 5051015202530354045501992 1993 1994 1995 1996 1997 1998Oilseeds Meat amp。 livestock Dairy Other food Beverages amp。 tobacco Textiles Apparel Wood amp。 paper Petrochemicals Metals Automobiles Other manu. Total manu. Total 2 7 . 42 3 . 5 51 2 9 . 0 32 0 . 22 1 . 5 9765 7 . 1 21 2 3 . 4 62 7 . 6 82 6 . 7 41 0 . 1 44 . 1 61 4 . 8 51 7 . 5 42 0 . 16 . 2 46 . 9 54 . 8 29 . 3 82 0 . 3 41 3 . 7 66 . 7 47 . 9 97 . 9 4Without With Lines 5 presentationCEMSx The impact of China?s WTO entry has a macroeconomic as well as industryspecific microeconomic impact Measures ? Tariff reductions ? Abolishment of nontariff barriers – Quotas (imp./exp.) – Licenses – Local content requirements – Distribution restrictions – Investment restrictions – etc. ? Introduction of legal protection – Copyrights – Autidumping Microeconomic impact ? More petitors ? Price pressure ? New sourcing strategies, lower factor cost ? More product variety ? Increasing productivity, restructuring ? Concentration process in some industries Macroeconomic impact ? More import amp。 export ? Accelerated growth of GDP ? Accelerated growth of ine (EDP/cap.) and wealth/cap ? More foreign investment ? Employment increase/decrease ? Structural change towards more petitiveness Lines 6 presentationCEMSx Trading short term pain against long term gain is a walk on the wire Short term pain Long term gain Source: Dev. amp。 Res. Ctr. Of the State Connect, Goldman Buck, World Bank Corporate profits (ROI) Employ ment Social capital GDP Wealth Trade Foreign Investment (direct) ? Price amp。 quality petition ? Decrease of profit margins ? Increase in bankruptcies ? 1% additional growth . ? 34% until 20xx ? High loss of labor/jobs in some industries (. agriculture, automotive), but new jobs created in other industries(. apparel) ? Increase of skilled labor ? Ruralurban discrepancy in wealth and ine (+% . / % .) ? % additional GDP/cap . 60% of population 6000 USD ine by 20xx ? % additional export growth . ? % additional import growth . ? 50bn annually Lines 7 presentationCEMSx The macroeconomic impact of China?s accession to the WTO will be especially strong in apparel, automobiles and electronics Some categories as example Without accession With accession Without accession With accession Without accession With accession Foodgrains Other agriculture Beverages/tobacco Extractive industries Textiles Wearing apparel Petrochemicals Metals Automobiles Electronics Utilities Trade/transport Total Table 10. Output, Exports and Imports as a Share of the World Economy Output Exports Imports 1995 20xx 1995 20xx 1995 20xx Source:, World Bank analysis 20xx Lines 8 presentationCEMSx With some dramatic consequences for employment (1) Source: World Bank and Dev. Res. Ctr. of the State Council Employment of skilled labor growth: 1995~20xx Foodgrains Meat amp。 livestock Beverages/tobacco Extractive industries Wearing apparel Without accession to WTO With accession to WTO Metals Automobiles Electronics Other manufactures Business/finance Lines 9 presentationCEMSx With some dramatic consequences for employment (2) Source: World Bank, 1999 Jobs lost/newly created (in m) 5 . 45 5 . 41 2 . 52 . 6Commerce Apparel amp。 Textile CoHon Wheat Rice Automotive Lines 10 presentationCEMSx Elect. media tele Media publishers 1) Fast moving consumer goods HIGH MEDIUM LOW Low High Low High Degree of globalization Protectionist barriers today Construction Pharmaceuticals Consumer electronics/ durables Branded FMCG1) ( . Coke) Apparel Automotive Agricultural products Transportation Commodity steel Protectionist barriers Tariffs in % Quota licenses Investment restrictions equity regional Degree of globalization Market share of global brands Production relocation costs in % of total turnover Domestic panies in global industries which enjoyed high protection will suffer most Impact 11 presentationCEMSx B. Automotive Lines 12 presentationCEMSx In the year 20xx China will be the largest truck market in Asia and passenger car demand will have grown to cars 20xx 20xx 20xx 20xx 20xx 20xx hi price mid price low price +10% . +14% . 640 960 1,650